(g) The Tenth Amendment of the United States Constitution guarantees to the states the power to tax;

(h) The Congress of the United States has enacted Section 4701 of the Omnibus Budget Reconciliation Act of 1990, P.L. 101-508, amending Section 1902 of the Social Security Act and authorizing state Medicaid agencies to attribute taxes imposed on Medicaid providers as part of the state share;

(i) By levying a tax on the Medicaid reimbursements of health care providers for the purpose of meeting state fund matching requirements pursuant to Title XIX of the Social Security Act, federal matching funds will be increased;

(j) By dedicating such additional revenue to the Medicaid program, health care provider fees may conform as closely as possible to usual and customary charges;

(k) Moneys generated in accordance with this article are supplementary only and shall not be used to reduce the general financial obligations of the state's medical assistance program as appropriated by the Legislature;

(l) These funds shall not be used for any purpose other than those purposes stated in this article and articles four-b and four-c, chapter nine of this code; and

(m) The Medicaid enhancement boards and Medicaid enhancement funds created pursuant to articles four-b and four-c, chapter nine of this code are created to carry out the purposes of this article.

§11-26-2. Short title; arrangement and classification.

This article may be cited as the "West Virginia Health Care Provider Medicaid Enhancement Tax Act of 1991." No inference, implication or presumption of legislative construction shall be drawn or made by reason of the location or grouping of any particular section or provision or portion of this article, and no legal effect shall be given to any descriptive matter or heading relating to any part, section, subdivision or paragraph of this article.

§11-26-3. Definitions.

The following words when used in this article have the meaning ascribed to them in this section, except in those instances where a different meaning is distinctly expressed or the context in which the word is used clearly indicates a different meaning is intended:

(a) "Cost-based service" means any service delivered by a health care provider reimbursed under the medical assistance program of this state solely on the basis of costs reported to the single state agency, whether or not the provider is operating on a profit or not-for-profit basis.

(b) "Department" means the West Virginia Department of Health and Human Resources. The term "secretary" means the secretary of the West Virginia Department of Health and Human Resources, or his or her designee.

(c) "Gross receipts" or "gross proceeds" means all payments received by a health care provider enrolled in this state's medical assistance program for services delivered pursuant to Title XIX of the United States Social Security Act, as amended, and means any and all Medicaid reimbursement payments made by the West Virginia Department of Health and Human Resources, or a division thereof, within the limitations set forth in this subsection, to such health care provider: Provided, That this definition does not include payments received for Medicare coinsurance and deductibles as defined in Title XVIII of the Social Security Act, and does not include reimbursements made for cost-based services.

(d) "Health care provider" or "provider" includes physician providers as defined in section one, article four-b, chapter nine of this code, ambulance service providers, dentist providers, general health care providers, and outpatient hospital service providers as defined in section one, article four-c, chapter nine of this code, and any other person directly receiving enhanced Medicaid reimbursement payments pursuant to article four-b or four-c, chapter nine of this code.

(e) "Single state agency" means the single state agency for Medicaid in this state.

(f) "Taxpayer" means a health care provider required to pay the Medicaid enhancement tax imposed by this article and entitled to receive the increased reimbursement in accordance with article four-b or four-c, chapter nine of this code.

§11-26-4. Imposition of excise tax; rate and application of tax.

(a) There is hereby levied and imposed an excise tax on the gross receipts or gross proceeds derived by health care providers enrolled in this state's medical assistance program. The amount of the tax shall be equal to one hundred percent of that portion of gross receipts paid to the health care provider by the single state agency from state revenues for all services delivered pursuant to Title XIX of the United States Social Security Act, to individuals who, at the time such services were delivered, were enrolled with the single state agency and eligible to receive Medicaid services, whether such health care provider is located within or without this state or such service is delivered within or without this state: Provided, That the following are not subject to the tax imposed in this article:

(2) That portion of a health care provider's reimbursement when the secretary certifies the state share so that the Medicaid reimbursement consists solely of federal financial participation, except that any gross receipts or gross proceeds derived by a health care provider from delivering Medicaid services that are not reimbursed on a certified match basis are taxable under this article: Provided, That nothing in this section prohibits the department from removing a service, or provider group, from the certified match program and placing that service, or provider group, under full Medicaid payments subject to the tax imposed by this article; and

(3) Employees or agents of a health care provider when that employee or agent does not directly receive the Medicaid reimbursement payment.

(b) The tax imposed by this section applies solely and exclusively to that portion of the Medicaid reimbursement payment made from state revenue for services delivered by the health care provider pursuant to Title XIX of the United States Social Security Act, as amended, which amount shall be determined as provided in subsection (c) of this section.

(c) From time to time, as is necessary, the secretary shall notify the Tax Commissioner in writing of the portion, stated as a uniform percentage, of each Medicaid reimbursement payment taxable under this article that constitutes the state's share of Medicaid program financial obligations in order to determine and tax only the state revenue share of that Medicaid reimbursement payment. After receipt of such notice, the Tax Commissioner shall immediately cause to be published in the state register notice of that percentage and its effective date for purposes of calculating the tax imposed by this article. Beginning January 1, 1992, and continuing until a notice of change in this percentage takes effect, the state revenue share of a Medicaid reimbursement is twenty-two and thirty-two hundredths percent, except as otherwise provided in this article.

§11-26-5. Administration.

(a) The Tax Commissioner shall collect the tax imposed by this article. After consultation with the secretary, the Tax Commissioner may establish procedures and prescribe forms necessary to implement and enforce this article. The Tax Commissioner shall account for all collections of the tax imposed by this article and for all collections of additions to tax, penalties and interest imposed with respect to this tax under article ten of this chapter. The amount collected shall be deposited, within fifteen days after its receipt by the Tax Commissioner, into the special revenue funds created in the State Treasury by articles four-b and four-c, chapter nine of this code, as follows:

(1) The physician provider Medicaid enhancement fund. -- All taxes, additions to tax, penalties and interest collected in accordance with this article from those health care providers represented by the physician Medicaid enhancement board and all donations and contributions received by the board in accordance with section five, article four-b, chapter nine of this code shall be deposited into the physician provider Medicaid enhancement fund;

(2) General Medicaid enhancement fund. -- All taxes, additions to tax, penalties and interest collected in accordance with this article from those health care providers represented by the general Medicaid enhancement board and all donations and contributions received by the board in accordance with section seven, article four-c, chapter nine of this code shall be deposited into the general Medicaid enhancement fund;

(3) The outpatient hospital Medicaid enhancement fund. -- All taxes, additions to tax, penalties and interest collected in accordance with this article from outpatient hospital providers represented by the outpatient hospital provider Medicaid enhancement board and all donations and contributions received by the board in accordance with section seven, article four-c, chapter nine of this code shall be deposited into the outpatient hospital Medicaid enhancement fund;

(4) The dentist provider Medicaid enhancement fund. -- All taxes, additions to tax, penalties and interest collected in accordance with this article from dentist providers represented by the dentist provider Medicaid enhancement board and all donations and contributions received by the board in accordance with section seven, article four-c, chapter nine of this code shall be deposited into the dentist provider Medicaid enhancement fund; and

(5) The ambulance service provider Medicaid enhancement fund. -- All taxes, additions to tax, penalties and interest collected in accordance with this article from ambulance service providers represented by the ambulance service provider Medicaid enhancement board and all donations and contributions received by the board in accordance with section seven, article four-c, chapter nine of this code shall be deposited into the ambulance service provider Medicaid enhancement fund.

(b) If a health care provider is represented by two or more boards, the tax paid by that provider shall be categorized and identified so that the Tax Commissioner may deposit the tax collected into the proper fund or funds.

(c) The department shall provide the Tax Commissioner with any information in its possession that the Tax Commissioner considers necessary for proper enforcement of this article. Notwithstanding any provision in this code to the contrary, the Tax Commissioner may enter into a written exchange of information agreement with the secretary to disclose return information pertaining to the tax imposed by this article for the purpose of facilitating administration of this state's medical assistance program. Any confidential information disclosed under this agreement shall remain confidential in the hands of the receiving agency as provided in section five-d, article ten of this chapter.

(d) For fiscal year one thousand nine hundred ninety-two, not more than $200,000 from the several Medicaid enhancement funds shall be used for administrative purposes with respect to this article and articles four-b and four-c, chapter nine of this code; of this amount, not more than $125,000 shall be transferred to a special revenue account in the treasury for use by the Department of Tax and Revenue and not more than $75,000 shall be transferred to a special revenue account in the treasury for use by the Department of Health and Human Resources.

(e) The secretary shall cause the remainder of all moneys deposited in the several Medicaid enhancement funds, after administrative expenses, to be transferred to the West Virginia medical services fund.

(f) Notwithstanding the provisions of subsections (d) and (e) of this section, for fiscal year one thousand nine hundred ninety-three and for each succeeding fiscal year, no expenditures from any of the several Medicaid enhancement funds are authorized except in accordance with appropriations by the Legislature.

§11-26-6. Accounting periods and methods of accounting.

(a) General rule. -- For purposes of the tax imposed by this article, a taxpayer's taxable year shall be the same as the taxpayer's taxable year for federal income tax purposes.

(b) Change of taxable year. -- If a taxpayer's taxable year is changed for federal income tax purposes, the taxpayer's taxable year for purposes of this article shall be similarly changed. The taxpayer shall provide a copy of the authorization for such change from the Internal Revenue Service, with its annual return for the taxable year filed under this article.

(c) Cash methods of accounting required. -- A taxpayer's method of accounting under this article shall be the cash method of accounting, whether or not taxpayer uses the cash method of accounting for federal income tax purposes.

§11-26-7. Tax return and payment.

(a) The annual tax levied by this article is due and payable in monthly installments, on or before the fifteenth day of the month succeeding the month in which the taxable gross receipts were received, except that the tax levied for the last month of the taxable year is due and payable on or before the last day of the first month of the next succeeding taxable year.

(b) The taxpayer shall, on or before the fifteenth day of each month, except for the last month of the taxable year, complete and mail to the Tax Commissioner a return for the preceding month, in the form prescribed by the Tax Commissioner, showing:

(1) The total gross receipts or gross proceeds received for services delivered pursuant to Title XIX of the Social Security Act, as amended, for that particular month;

(2) The gross proceeds upon which the tax is based;

(3) The amount of the tax for which the taxpayer is liable; and

(4) Any other information necessary in the computation and collection of the tax which the Tax Commissioner may require. The taxpayer shall include with the return a remittance for the amount of the tax for the period covered by the return.

(c) On or before the last day of the first month after the end of the taxable year, every taxpayer subject to the tax imposed by this article shall make and file an annual return for the entire taxable year showing such information as the Tax Commissioner may require and computing the amount of taxes due under this article for the entire taxable year. The Tax Commissioner shall allow a credit against this annual tax liability for the amount of tax imposed by this article (exclusive of any addition to tax, penalties or interest paid with respect thereto) previously paid by the taxpayer on gross receipts included in the annual return. The taxpayer shall submit with the annual return a remittance for the net amount of tax shown to be due.

§11-26-8. Extension of time for filing returns.

The Tax Commissioner may, upon written request received on or prior to the due date of the annual return or any periodic estimate, grant a reasonable extension of time for filing any return or other document required by this article, upon such terms as he or she may by rule prescribe, or by contract require, if good cause satisfactory to the Tax Commissioner is provided by the taxpayer.

§11-26-9. Extension of time for paying tax.

(a) Amount determined on return. -- The Tax Commissioner may extend the time for payment of the amount of the tax shown, or required to be shown, on any return required by this article (or any periodic installment payments), for a reasonable period not to exceed six months from the date fixed for payment thereof.

(b) Amount determined as deficiency. -- Under rules prescribed by the Tax Commissioner, he or she may extend the time for the payment of the amount determined as a deficiency of the taxes imposed by this article for a period not to exceed eighteen months from the date fixed for payment of the deficiency. In exceptional cases, a further period of time not to exceed twelve months may be granted. The Tax Commissioner may grant an extension under this subsection only where it is shown to his or her satisfaction that payment of a deficiency upon the date fixed for the payment thereof will result in undue hardship to the taxpayer.

(c) No extension for certain deficiencies. -- The Tax Commissioner may not grant an extension under this section for any deficiency if the deficiency is due to negligence, to intentional disregard of rules and regulations, or to fraud with intent to evade tax.

§11-26-10. Place for filing returns or other documents.

Tax returns, statements, or other documents, or copies thereof, required by this article or by rules shall be filed with the Tax Commissioner by delivery, in person or by mail, to his or her office in Charleston, West Virginia: Provided, That the Tax Commissioner may, by rule, prescribe the place for filing such returns, statements, or other documents, or copies thereof.

§11-26-11. Signing of returns and other documents.

(a) General. -- Any return, statement or other document required to be made under the provisions of this article shall be signed in accordance with instructions or regulations prescribed by the Tax Commissioner.

(b) Signing of corporation returns. -- The president, vice president, treasurer, assistant treasurer, chief accounting officer or any other duly authorized officer shall sign the return of a corporation. In the case of a return made for a corporation by a fiduciary, the fiduciary shall sign the return. The fact that an individual's name is signed on the return is prima facie evidence that the individual is authorized to sign the return on behalf of the corporation.

(c) Signing of partnership returns. -- Any one of the partners shall sign the return of a partnership. The fact that a partner's name is signed on the return is prima facie evidence that that partner is authorized to sign the return on behalf of the partnership.

(d) Signature presumed authentic. -- The fact that an individual's name is signed to a return, statement, or other document is prima facie evidence for all purposes that the return, statement or other document was actually signed by him or her.

(e) Verification of returns. -- Except as otherwise provided by the Tax Commissioner, any return, declaration or other document required to be made under this article shall contain or be verified by a written declaration that it is made under the penalties of perjury.

§11-26-12. Records.

(a) Every health care provider liable for reporting or paying tax under this article shall keep such records, receipts, invoices, and other pertinent papers in such forms as the Tax Commissioner may require.

(b) Every taxpayer shall keep such records for not less than three years after the annual return is filed as required under this article, unless the Tax Commissioner in writing authorizes their earlier destruction. An extension of time for making an assessment shall automatically extend the time period for keeping the records for all years subject to audit covered in the agreement for extension of time.

§11-26-13. Refunds and credits.

(a) General rule. -- In the case of erroneous payment of the tax imposed by this article, or the erroneous payment of additions to tax, penalties or interest imposed, pursuant to article ten of this chapter, with respect to the tax imposed by this article, the Tax Commissioner shall, subject to the provisions of this section, refund to the taxpayer the amount of the erroneous payment or, if the taxpayer so elects, apply the same as a credit against the taxpayer's liability for this tax for other periods. The amount refunded or credited shall include any interest due the taxpayer under the provisions of section seventeen, article ten of this chapter.

(b) Claim for refund or credit. -- No refund or credit shall be made unless the taxpayer filed a timely claim for refund or credit with the Tax Commissioner setting forth the amount to be refunded along with the reason or reasons why the taxpayer believes the amount should be refunded, or credited to taxpayer's account, and a copy of any papers supporting the taxpayer's claim. A person against whom an assessment, or an administrative decision, has become final with respect to this tax is not entitled to pay the amount thereof and then file a claim for refund or credit of the amount paid. The Tax Commissioner shall determine the validity of the taxpayer's claim and notify the taxpayer in writing of his or her determination.

(c) Petition for refund or credit; hearing. -- If the taxpayer is not satisfied with the Tax Commissioner's determination of his or her claim for refund or credit, or if the Tax Commissioner has not determined the taxpayer's claim within ninety days after the claim was filed, the taxpayer may file with the Tax Commissioner, either by personal service or by certified mail, a petition for refund or credit: Provided, That no petition for refund or credit may be filed more than sixty days after the taxpayer is served with a notice of the denial of his or her claim. The petition for refund or credit shall be in writing, verified under oath by the taxpayer or his or her duly authorized agent having knowledge of the facts, and shall set forth with particularity the items of the determination objected to, together with the reasons for the objections. When a petition for refund or credit is properly filed, the procedures for hearing and for decision prescribed in section nine, article ten of this chapter shall be followed.

(d) Appeal. -- An appeal from the Tax Commissioner's decision upon the petition for refund or credit may be taken by the taxpayer in the same manner and under the same procedure as that set forth in section eleven, article ten of this chapter relating to an appeal from the Tax Commissioner's decision on a petition for assessment, but no bond shall be required of the taxpayer.

(e) Decision of the court. -- Whenever an appeal is to review an administrative decision on a petition for refund or credit, the court may determine the legal rights of the parties but in no event shall it enter a judgment for money.

(f) Refund made or credit established. -- The Tax Commissioner shall promptly issue his or her requisition on the treasury or establish a credit, as requested by the taxpayer, for any amount finally administratively or judicially determined to be an erroneous payment of any tax administered under this article. The Auditor shall issue his or her warrant on the treasurer for any refund requisitioned under this subsection payable to the taxpayer entitled to the refund, and the treasurer shall pay such warrant out of the fund into which the amount so refunded was originally paid.

(g) Forms for claim for refund or credit. -- The Tax Commissioner may prescribe by rule or regulation the forms for claims for refund or credit.

(h) Remedy exclusive. -- The procedure provided by this section constitutes the sole method of obtaining any refund or any credit, it being the intent of this section that the procedure set forth in this article is in lieu of the procedure set forth in section fourteen, article ten of this chapter, and in lieu of any other remedy, including the uniform declaratory judgments act embodied in article thirteen, chapter fifty-five of this code and the provisions of section two-a, article one of this chapter.

(i) Erroneous refund made or credit established. -- If the Tax Commissioner believes that an erroneous refund has been made or an erroneous credit has been established, he or she may proceed to investigate and may make an assessment to recover the amount of such refund or credit within two years after the date the refund was paid or the credit was established, unless a fraudulent claim was filed. In that event, the two statutes of limitations shall be six years.

(j) Limitation on claim for refund or credit.

(1) General rule. -- Whenever a taxpayer claims to be entitled to a refund or credit for erroneous payment of any tax, additions to tax, penalties or interest paid into the treasury of this state, the taxpayer shall, except as provided in subsection (d) of this section, file his or her claim within three years after the due date of the return in respect of which the tax was imposed or within two years from the date the tax was paid, whichever of such periods expires later, or if no return was filed by the taxpayer, within two years from the time the tax was paid, and not thereafter.

(2) Extension of time for filing claim by agreement. -- The Tax Commissioner and the taxpayer may enter into written agreement to extend the period within which the taxpayer may file a claim for refund or credit, which period shall not exceed two years. The period agreed upon may be extended for additional periods not in excess of two years each by subsequent agreements in writing made before the expiration of the period previously agreed upon.

(3) Special rule where agreement to extend time for making an assessment. -- Notwithstanding subdivisions (1) and (2) of this subsection, if an agreement is made under the provisions of section fifteen of this article extending the time period in which an assessment of a tax can be made, then the time period for filing a claim for refund or credit for an erroneous payment of the same tax made during the periods subject to assessment under the erroneous payment of this tax made during the periods subject to assessment under the extension agreement shall also be extended for the period of the extension agreement plus ninety days.

(k) "Erroneous payment" defined. -- The term erroneous payment means a payment of the tax imposed by this article or the additions to tax, penalties or interest imposed with respect to this tax pursuant to article ten of this chapter, when such payment is due to a mathematical or clerical error or when such payment is collected after the period of limitation properly applicable thereto.

The secretary may cancel or refuse to issue, extend, or reinstate a Medicaid enrollment to any provider who has failed to pay any tax that is delinquent under this article.

§11-26-15. General procedure and administration.

Each and every provision of the "West Virginia Tax Procedure and Administration Act" set forth in article ten of this chapter applies, except as expressly provided in this article, to the tax imposed by this article with like effect as if the act were applicable only to the tax imposed by this article and were set forth in extenso in this article.

§11-26-16. Crimes and penalties.

Each and every provision of the "West Virginia Tax Crimes and Penalties Act" set forth in article nine of this chapter applies to the tax imposed by this article with like effect as if the act were applicable only to the tax imposed by this article and were set forth in extenso in this article.

§11-26-17. Effective dates.

(a) The tax imposed by this article takes effect on January 1, 1992, and applies to gross receipts received on or after that date: Provided, That the tax with respect to providers whose fee schedules require prior approval of the health care financing administration is effective on the effective date approved by the health care financing administration: Provided, however, That the tax with respect to those providers whose fees are subject to an established Medicare upper limit, the effective date is the first day of the month immediately succeeding the date the fees can be raised sufficiently to comply with section ten, article four-c, chapter nine of this code.

(b) Any change in the percentage of Medicaid reimbursement that constitutes state revenue for purposes of calculating this tax, published as provided in subsection (c), section three of this article, applies first to gross receipts received during any calendar month that begins not less than thirty days after notice of a change in the percentage is filed in the state register, or the first day of any later calendar month specified in the notice. The percentage remains in effect until a subsequent change in the percentage takes effect and applies to taxable gross receipts received during the period during which the percentage was in effect, whether or not the Medicaid services were furnished, supplied, or rendered during that period.

§11-26-18.

Repealed.

Acts, 1993 1st Ex. Sess., Ch. 7.

§11-26-19. Severability.

If any provision of this article or the application thereof shall for any reason be adjudged by any court of competent jurisdiction to be invalid, such judgment shall not affect, impair or invalidate the remainder of said article, but shall be confined in its operation to the provision thereof directly involved in the controversy in which such judgment shall have been rendered, and the applicability of such provision to other persons or circumstances shall not be affected thereby.

§11-26-20. Transition rules; penalties; effective date.

(a) The tax imposed by this article shall not apply to Medicaid reimbursement payments received by health care providers after May 31, 1993.

(b) All persons subject to the tax imposed by this article prior to June 1, 1993, shall make and file a final return with the Tax Commissioner, on or before June 15, 1993, reporting such information as the Tax Commissioner may require. This return shall be in lieu of the return otherwise due under this article on June 15, 1993. With this return, the provider shall remit the balance of tax due under this article with respect to Medicaid services rendered before the said first day of June.

(c) For purposes of subsection (b) of this section, and notwithstanding any provision of this article to the contrary, the balance of tax due under this article shall be the sum of the following components: (1) The tax due on the state share of Medicaid reimbursement payments received by the provider before the said first day of June and upon which tax was not previously paid by the provider; and (2) the tax due on the state share of Medicaid reimbursement payments for services rendered before the said first day of June that will be received on or after that date either because the charges for such service were not being billed to the Department of Health and Human Resources before the said first day of June, or the bill for such services was not paid by that department before the said first day of June. Providers who keep their records on a cash basis for federal income tax purposes and who are required by this subsection to pay tax on Medicaid reimbursement payments they did not receive before the said first day of June may deduct the amount of such reimbursement payments, when they are actually received, when determining their tax liability under article thirteen-a or twenty-seven of this chapter after said first day of June.

(d) Any Medicaid tax owed to the Tax Commissioner which is not remitted by June 15, 1993, becomes delinquent as of June 16, 1993, notwithstanding any provision of this article or article ten of this chapter to the contrary.

(e) Any person required to pay Medicaid tax under this article who fails to pay the amount due by June 20, 1993, shall be subject to a civil penalty equal to two hundred percent of the delinquent Medicaid tax owed by such person. Such penalty shall be assessed and collected as provided in article ten of this chapter. The amount of penalty collected shall be deposited into the state share fund established in the Treasurer's Office.

(f) The provisions of this section shall take effect on June 1, 1993.

Note: WV Code updated with legislation passed through the 2017 Regular Session
The West Virginia Code Online is an unofficial copy of the annotated WV Code, provided as a convenience. It has NOT been edited for publication, and is not in any way official or authoritative.